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Anaplan (PLAN) Q3 Loss Narrower than Expected, Revenues Up Y/Y

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Anaplan (PLAN - Free Report) reported third-quarter fiscal 2021 adjusted loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 10 cents as well as the year-ago quarter’s loss of 8 cents.

Revenues of $114.9 million beat the Zacks Consensus Estimate by 3.9% and increased 28.5% year over year.

The revenue growth was majorly driven by the strong adoption of the company’s cloud solutions and higher demand for its sales performance management capabilities.

Quarterly Details

Subscription revenues (91.4% of total revenues) soared 31.4% year over year to $104.7 million.

Revenues from Professional services (8.9% of total revenues) rose 4.7% year over year to $10.2 million.

 

Anaplan, Inc. Price, Consensus and EPS Surprise

Anaplan, Inc. Price, Consensus and EPS Surprise

Anaplan, Inc. price-consensus-eps-surprise-chart | Anaplan, Inc. Quote

 

The company’s dollar-based net expansion rate (NRR) was 113%, lower than the fiscal year 2020 NRR of 122%, reflecting a fall in the percentage of booked deals due to coronavirus-led disruptions in the reported quarter.

Notably, calculated billings in the fiscal third quarter were $145 million, up 27% year over year. Moreover, Remaining Performance Obligation (RPO) increased 25% year over year to $740 million.

Anaplan is now serving 417 customers with more than $250K in annual recurring revenues, up 29% on a year-over-year basis.    

Notably, the company inked a partnership deal with Alphabet (GOOGL - Free Report) to provide the Anaplan platform on Google Cloud. The deal aids the expansion of Anaplan’s enterprise clientele and drives customer acquisition.

Further, it entered into a multi-year deal with Shell Information Technology International BV, to facilitate digital transformation for the latter using the Anaplan platform.

Additionally, the company launched PlanIQ, to extend its artificial intelligence and machine learning capabilities, in collaboration with Amazon Forecast, which is a fully-managed service from Amazon’s (AMZN - Free Report) cloud arm, Amazon Web Services (AWS).

Moreover, this Zacks Rank #3 (Hold) company benefits from the significant contribution of its solid partner base, which includes Deloitte, Salesforce (CRM - Free Report) , Adobe, ServiceNow, Workday and SAP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Operating Details

Gross margin on a non-GAAP basis in the reported quarter was 76% and remained steady on a year-over-year basis.

Subscription gross margin was 83%, declining 167 basis points (bps) year over year. Services gross margin was roughly 5%, down 400 bps from the year-ago quarter.

Total non-GAAP operating costs grew 20.8% year over year to $93.4 million, driven by the company’s go-to-market investments.

General & administrative expenses escalated 2.3% year over year to $22.9 million, while sales and marketing expenses rose 21.8% to $73.9 million. Additionally, research and development expenses shot up 49.6% year over year to $24.6 million.

Anaplan’s non-GAAP operating loss was $6.1 million compared with a loss of $8.8 million in the year-ago quarter.

Balance Sheet & Cash Flow

Total cash and cash equivalents as of Oct 31, 2020, were $296.8 million compared with $304.9 million as of Jul 31, 2020.

Non-GAAP free cash outflow was $9 million in the quarter.

Guidance

For fourth-quarter fiscal 2021, Anaplan expects revenues of $118.5-$119.5 million. Services revenues are expected in the $9.5-$10.5 million band. Further, it expects non-GAAP operating margin between negative 10.5% and 11.5%.

Billings are expected between $152 million and $153 million.

Moreover, Anaplan expects to benefit from the ongoing digital transformation across enterprises and the expansion of its existing customer base.

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